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Kenya

The Busia Kakamega - Greenstone Belt in Kenyan is a highly prospective belt which saw extensive mining, albeit on a small scale, during the colonial era. Subsequent to this Kenya has seen limited exploration activity, with companies in East Africa focusing primarily on Tanzania. Given the lack of activity, the gold potential of Kenya has not been systematically explored using modern exploration techniques and is seen as a highly attractive opportunity.

Overview

In February 2017 Acacia announced the maiden NI 43-101 compliant Inferred Mineral Resource Estimate (MRE) on the Liranda Corridor, within its West Kenya Project. The Inferred MRE of 3.46 million tonnes at 12.1 grams per tonne for 1.31 million ounces is primarily located on three main zones of mineralisation at the Acacia prospect.

The gold mineralisation at Acacia is associated with shear zones ranging in width from 0.5 metres to 10 metres (averaging approximately 3 metres true width dependent on the zone), hosted by a mafic volcanic sequence. The strike lengths of the explored sections of the main mineralised zones at Acacia vary between 200m and 600m and the resource is currently defined down to a vertical depth of 750m with the structures open down plunge.

In addition, we have identified mineralised zones on the Bushiangala prospect, approximately one kilometre away from the Acacia prospect, but at this stage this material remains unclassified due to drill density and the need to further understand the controls on the mineralisation and its continuity. Recent results from the Bushiangala prospect include, 7m @ 17.6g/t Au, 3m @ 6.88g/t Au and 4m @ 9.99g/t from step-out holes.

Based on the work undertaken to date, the current scale of the mineralisation is between 0.60Mt and 1.50Mt at a grade between 6.0g/t Au and 10.0g/t Au, for a metal target of between 190,000 ounces and 290,000 ounces of contained gold. A key element of the 2017 drilling programmes at Bushiangala is to both move this existing target mineralisation into the Inferred Resource category and to expand the scale of the targeted mineralisation.

The total drilling on Liranda Corridor targets since 2014 amounts to 44 Reverse Circulation holes for 4,438 metres and 132 diamond core holes for 64,700 metres.

Mineral Resource

The Mineral Resource has been estimated by Ms C Pitman, P.Geo.(Ontario) of AdiuvareGE, who takes responsibility for the estimate. All the modelling and the estimation were carried out in Datamine® software. The Mineral Resources are stated using 12 February 2017 as the cut-off date for the drill assay database. The Inferred Mineral Resource has been estimated in conformity with the CIM Mineral Resources and Mineral Reserves Estimation Best Practice Guidelines (CIM, 2003) and are classified according to the CIM Standard Definition for Mineral Resources and Mineral Reserves (CIM, 2014). Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

Zone Cut-off Grade
Au g/t
Tonnes Grade
Au
g/t
Ounces
AZ1m 2 1,606,000 12.3 618,700
AZ2m 2 993,400 9.1 282,000
AZ2a_oxide 3.5 36,900 17.9 18,000
AZ2a_fresh 2 565,600 16.3 284,300
AZ2b 2 98,900 8.7 26,600
AZX1 2.5 160,600 14.7 76,100
Total Inferred 3,461,400 12.1 1,305,700


Inferred Mineral Resource estimate for the Acacia prospect

2017 Work Programme

During 2017, we plan to spend US$12.8 million on exploration on the West Kenya project, with the majority of this on a 45,000 metre drilling programme on the Liranda Corridor which is designed to:

  • Test the lateral and depth extensions of the Acacia prospect, together with infilling the current resource outline.
  • Infill and expand known mineralisation at the Bushiangala prospect to be able to upgrade the unclassified target mineralisation into the Inferred category, and test for lateral and depth extensions to the prospect as we have been doing on the Acacia prospect.
  • Test the Shigokho-Shibunane prospects 2-3 kilometres to the southeast along the Liranda Corridor which are large gold in-soil anomalies with positive initial drill results.

Drilling to date in 2017 on the Acacia prospect continues to deliver high grade intersections, these include the following assays, which are not included in the current resource:

  • LCD00133: 0.5m @ 97.2 g/t Au from 586m and 3.3m @ 10.9 g/t Au from 754m
  • LCD00135: 3.3m @ 33.0 g/t Au from 665m and 2.3m @ 5.90 g/t Au from 685m.
  • LCD00136: 2.5m @ 7.92 g/t Au from 809m.

We expect the drilling to continue on the Acacia prospect for at least a further 12 months and are targeting a significant increase in the resource to 2 million ounces prior to the end of 2017. We also plan to commence a scoping study looking at the potential for an underground mining operation towards the end of 2017. In order to increase the testing of the five main prospects in the Liranda Corridor we also plan to increase the number of drill rigs operating to eight.

Schematic Long Section of the targets along the Liranda Corridor

Acacia Prospect Simpliifed Combined Long Section (A-B), looking north

Location

The Liranda Corridor is located in the County of Kakamega within the Western Province of Kenya. The project area lies approximately 48 km north-northwest of Kisumu City (Kenya’s third largest City) and 30km southwest of Kakamega and 350 km west of Nairobi. The Liranda Corridor covers a 7km2 area within Special Licence 213 and sits towards the northeast of Acacia’s West Kenya Project consisting of five exploration licences covering a land package of approximately 1,600km2.

The Liranda Corridor falls within the Busia-Kakamega Greenstone Belt, the northern most greenstone belt in the Lake Victoria Goldfields. It comprises an overall northeast-ward facing sequence of volcanic and sedimentary rocks intruded by granitoids.

Location of the Liranda Project with the West Kenya Project, which consists of five licences for approximately 1,600km2.

Exploration History

Follow-up diamond drilling of 12 prospect-scale targets within the Liranda Corridor identified three areas of focus, the Acacia, Bushiangala and Shigokho prospects, with narrow high-grade gold intersections encountered at all three. The Acacia and Bushiangala prospects were prioritised for further drill testing and are located within the centre of the Liranda Corridor where a 5km x 2km area of high-intensity flooding of carbonate-sericite alteration has been mapped in outcrop and drilling.  This strong alteration zone has predominantly overprinted mafic volcanic rocks and in some examples sediments throughout the sequence. The carbonate flooding is of an intensity and size typical of major Archaean lode gold systems. Proximal to mineralisation, the alteration is represented by silica flooding, sericite and green mica alteration.

Given the assay results from the initial diamond core drilling, the mineralisation style and structural information, it was decided to target mineralisation at depth early in the drill programme with ten diamond core holes drilled beneath each prospect targeting gold mineralisation at between 300 and 500m vertical depth.  Several of the deep diamond core holes were successful in identifying multiple narrow high-grade zones and subsequently it was decided to focus on the Acacia prospect, with a smaller amount of drilling on the Bushiangala prospect.

During 2016 a total of 70 diamond holes for 40,600 metres were drilled on the Liranda Corridor targeting extensions of mineralisation on the Bushiangala and Acacia shoots. This brings the total drilling on Liranda Corridor targets since 2014 to 44 RC Holes for 4,438 metres and 132 DD holes for 64,700 metres.

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